Disclaimer: This information is educational only and not legal advice. For guidance about a specific case, consult a licensed Maine attorney.
Detailed Answer
When you run your own business, proving lost wages after an accident means showing what you actually would have earned but for the injury. Courts and insurers in Maine look for reliable, contemporaneous records that convert your lost work into a dollar amount. The goal is to document past income you missed and, if applicable, future lost earning capacity.
What counts as recoverable lost income
- Past lost earnings: net income you lost from work you could not do after the accident.
- Future lost earnings or loss of earning capacity: if your injury reduces your ability to earn in the future.
- Related out‑of‑pocket business losses: canceled contracts, lost deposits, or clients who left because you could not perform.
Key differences for self‑employed claimants
Self‑employed people do not have a single W‑2 wage. Insurers and courts want evidence of what you actually earned (net profit), not just gross receipts. You must show the income you lost after accounting for ordinary business expenses you would have paid anyway.
Primary items to assemble
Collect all contemporaneous records that show your normal earnings and the interruption caused by the accident. Useful items include:
- Federal tax returns (Schedule C or appropriate business schedules) for the last 2–3 years to show typical income patterns.
- Profit & loss statements or year‑to‑date bookkeeping reports.
- Copies of invoices, bills, contracts, estimates, and work orders showing scheduled or expected work you missed.
- 1099 forms, bank deposits, merchant‑processing statements (PayPal, Stripe, Square) and bank records that show payments you received historically.
- Receipts and records of ordinary business expenses (materials, subcontractors) so you can show net profit rather than gross sales.
- A contemporaneous calendar, job logs, emails or text messages with clients showing cancelled appointments or missed deadlines.
- Client affidavits or written statements confirming jobs lost, deposits returned, or delayed projects caused by the injury.
- If you hired someone to cover work, invoices or payroll records showing those replacement costs.
How to calculate the loss
- Establish a baseline: use past tax returns and business records to calculate average monthly net income before the accident. Use 2–3 years if your income varies seasonally.
- Calculate actual post‑accident income: total what you earned during the recovery period.
- Subtract actual earnings from baseline earnings during the same period. The difference equals past lost earnings.
- Adjust for expenses saved: if you normally pay a subcontractor but did not because you had no work, deduct that saved expense from the lost gross to avoid overstating net loss.
- For future losses, show medical evidence about lasting impairment plus economic evidence (your age, occupation, earnings history) to estimate reduced future earning capacity.
Documentation format and presentation
Organize documents chronologically and summarize them in a one‑page damages chart. Insurers and courts respond best to clear tables showing the baseline, actual earnings, and the resulting loss for each time period.
When a professional helps
If your income is complex or your claim is large, an accountant or CPA who prepares damages calculations for injury cases can convert your records into a reliable damages report. That report should explain methods and assumptions and attach source documents (tax returns, bank statements, invoices).
Maine‑specific routes and resources
If the accident is a motor vehicle crash, start with your insurer and the other driver’s insurer. For questions about insurance rules, see the Maine Bureau of Insurance: https://www.maine.gov/pfr/insurance/. If the injury happened at work, workers’ compensation may apply; see the Maine Workers’ Compensation Board: https://www.maine.gov/wcb/. For filing a civil suit or learning how to start a court case in Maine, see the Maine Judicial Branch: https://www.courts.maine.gov/.
Common legal issues in Maine claims
- Insurers will often challenge projected future losses—support projections with conservative, well‑documented calculations.
- Defendants may argue you didn’t mitigate damages. Make reasonable efforts to find alternative work or document why you could not.
- Disputes can lead to depositions or expert testimony; thorough records reduce risk and ease settlement talks.
Helpful Hints
- Start collecting evidence immediately. Contemporaneous records (emails, texts, calendars) carry the most weight.
- Keep a daily journal of work you missed, who canceled, and communications about delayed projects.
- Keep separate business and personal bank accounts and label deposits clearly to make tracing income easier.
- Use tax returns to prove a multi‑year pattern. If you had an unusual year before the accident, explain it with supporting documents.
- Do not overstate losses. Deduct expenses you saved and be ready to explain your calculations.
- If you hire help to prepare damages calculations, ask the accountant to include source documents and a clear methodology you can share with the insurer or a lawyer.
- Communicate promptly with your insurer, but avoid giving recorded statements without consulting a lawyer if the claim is serious.
- If you are unsure whether workers’ compensation applies, contact the Maine Workers’ Compensation Board: https://www.maine.gov/wcb/.
- Use IRS records (1099s, Schedule C) to corroborate income. See the IRS Self‑Employed Individuals Tax Center: https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center.
- Before filing a lawsuit or if the insurer denies your claim, speak with a Maine attorney who handles injury and loss‑of‑earnings claims to review your documents and next steps.
If you want, gather the records listed above and contact a Maine attorney for a case review. Bring tax returns, bank statements, invoices, contracts, and any medical records related to the accident.